by Elizabeth Stanton
Yahoo! Finance
(Bloomberg) — An auction of inflation-protected US Treasuries on Thursday drew the highest yield in more than a decade.
[…] The $20 billion sale of 10-year Treasury Inflation-Protected Securities, or TIPS, was awarded at 2.243%, the highest result since January 2009 and about a basis point higher than the indicated yield at 1 p.m. New York time, the bidding deadline. While Treasury yields of all types have been gradually rising and linger shy of their 2023 peak levels, auctions capture yields only once per month.
The rise in inflation-protected yields reflects “a combination of underlying growth fundamentals and the market pricing in longer-term real term premium as a result of concerns about the fiscal outlook,” said Michael Pond, head of global inflation-linked market strategy at Barclays Capital Inc. “The economy has held up well despite higher rates.” The Federal Reserve’s ongoing reduction in its holdings of Treasuries is also a factor, he said.